By the first decade of 2000, the state-led development models amongst the BRICS had reignited interest in more interventionist models, most notably China and Brazil. Both domestic and global conditions account for the more neo-Keynesian shift in ANC economic policy. Whilst this shift - at the domestic level - is often attributed to the Zuma presidency owing to his apparent courting of labour and the left to oust Mbeki, the conditions which account for this shift were already well underway before the palace coup within the ANC. This evolution occurred in two phases: the first occurred in the late 1990s and in the early 2000s with the emergence of widespread social struggles which in combination with the divisions within the Tripartite Alliance triggered by the adoption of GEAR, ‘unsettled political elites and prompted them to expand the reach of social support grants’ (Habib, 2013:94). The second is that given the extent to which Cosatu and the SACP had increased leverage - given that they had given an institutional platform for Zuma’s ascendance to power, ‘the power differential in favour of business that prevailed under Mbeki’s reign eroded slightly in favour of a more equitable balance of power - both within the party and in the country as a whole’ (Habib, 2013:95).
At the global level, the effects of the Financial Crisis and the central role key emerging developing economies had come to play - as witnessed by their role in the now enlarged G20 rather than the G8 - as well as the evolution of developmental thinking that had especially with the MDG’s ensured greater receptivity towards notions of redistributive justice amongst both Bretton Woods and UN-aligned organisations (van der Westhuizen, 2012), recreated conditions for the consideration of more statist development models. (The Economist issue). Amongst the large emerging economies that had withered the storm of 2008, two features became prominent: their continued use of state-owned corporations and the extent to which these economies expanded social welfare programmes (to complement the liberalisation processes of the 1990s).
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Given Brazil’s success with the Bolsa Familia, its record economic growth until 2013 and the extent to which it shared so many similar developmental challenges with South Africa - made the Brazilian model nearly as appealing in the mid-2000s - as Malaysia was in the 1990s. Enthralled by Brazil’s success in reducing poverty through state-led programmes, South African labour in particular clamoured that conditions were ripe for a “Lula Moment’. At the launch of the book ‘A Lula Moment for South Africa’ at the Chris Hani Institute, delegates noted that ‘there is much to admire in the achievements of the PT and of Lula of Brazil. By significantly raising the incomes of the poorest during a growth phase fuelled by the commodities boom and after that, Brazil created a virtuous cycle of income-led growth in which higher wages created a domestic market for locally produced consumer goods, fuelling further economic and jobs growth’ (Paton, Business Day 21 Feb 2014 Is SA ready for a labour-led ‘Lula’ moment?). Yet labour was not the only constituency interested in Brazil. In 2009, the pro-market think tank, the Centre for Development Enterprise (CDE) embarked upon a dedicated focus upon analysing ‘market based development solutions’ in Brazil, India and South Africa (www.democracy.cde.org.za).
The extent to which many of the world’s largest ‘emerging markets’ were relatively better insulated against the immediate effects of the financial contagion and their ability to weather the storm relatively better than their Northern counterparts, loomed large throughout the crisis. That the world turned to the BRIC countries - with their pronounced role for state-driven capitalism - to help underwrite the continued stability of the global financial system, also pointed towards the realignment of global power centres.
Throughout all of this, China’s role has been central.
Although China has not explicitly sought to articulate a ‘Beijing Consensus’, the model of a strong and economically interventionist state has made an impact within ANC policy circles. Since 2009, the ANC has sent numerous delegations from its top-decision making structure, the National Executive Committee (NEC), to learn how the Chinese run their party and government, how they train their cadres and about China’s economic situation. “"The ANC has relationships with all progressive parties around the world. We share experiences and views and perspectives on issues of international governance," ANC spokesperson Keith Khoza said after one visit in 2011.2 NEC member and Gauteng ANC leader Paul Mashatile confirmed that NEC members travelled to China for ‘political lessons’, whilst another party official noted that the ANC ‘wants to know “how the party (CCP) manages itself” given the internal problems of discipline and governance in the ANC’3. ANC Secretary-General Gwede Mantashe also admonished Western investors to realise ‘South Africa does not need their money’ given that it can turn to India and China to fund economic development. ‘Sometimes when you deal with the IMF or the World Bank or anything, they feel that you must stop thinking because they have money and they will tell you what to do with the money […] As long as that is the case, you are going to see the fast growth of the ‘Look East’
policy4. More dangerous is that policy-peddling in terms of an undefined notion of a ‘developmental state’
may set the scene for the justification of a discourse citing democracy as an impediment to rapid development5. An opinion poll conducted in 2012 asked respondents to rank countries they thought could be considered as South Africa’s ally or ‘close friends’. China scored the highest at 26 per cent, followed by the United States at 20 per cent. Asked which countries South Africa could learn the most from about alleviating poverty, China again emerged as first at 26 per cent, followed by Brazil and Botswana at 20 per cent.6
It is in this context that the symbolic value of the invitation by Beijing into the club of BRIC states (Brazil, Russia, India and China) during the summit in Sanya/China, in 2011 looms large. Pretoria’s
2 “South African party delegation meets Chinese counterparts to boost ties”, Xinhua News Agency, 10 October 2011. See also “SAfrica: "Leaked" report gives details, insights on ANC's "study trips" to China”, Mail & Guardian (Johannesburg), 29 November 2010
3 Rossouw, M., “ANC’s secret China trip,” City Press, 9 October (2011); The Chinese party, for its part, extended relations also to other South African parties and invited also a delegation of the opposition Democratic Alliance, which is the provincial governing party in South Africa’s Western Cape province, and the Inkatha Freedom Party. These study visits are part of China’s broader foreign policy, preparing contacts and agreements at a later stage (Shinn and Eisenman, China-Africa, p.82.).
4 Reuters, ANC says turning to China, India, 23 May (2012).
5 Gumede, W. ‘FPC Briefing: Challenges facing South Africa-China relations’, The Foreign Policy Centre.
http://fpc.org.uk/fsblob/1465.pdf. Accessed: 25 August 2012.
6 Unpublished survey data, ‘Project Saruman’, Ipsos Research Surveys, commissioned by Van der Westhuizen, J. December 2012.
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membership of the renamed BRICS and hosting the groupings 5th summit in Durban in 2013, signalled its commitment to working towards a more multipolar world order.
China is attracted to South Africa – as it is to other mineral-rich powers like Australia, Brazil, and Canada – but it also bears directly upon the role of the so-called ‘minerals-energy complex’ (MEC) that has been central to the history of South Africa’s economy and its role in southern Africa. For example, at the very ‘epicentre’ of the MEC, finance has emerged as ‘a separate but related’ set of economic activities closely associated with minerals and related sectors ‘but in which corporate restructuring and financial speculation have occurred at the expense of providing funds for investment for the expansion and restructuring of production itself’7.
The $5.5 billion purchase of a 20% stake in South Africa’s Standard Bank by China’s ICBC in 2008 was an attempt to service other Chinese interests and investment across Africa using a bank with an existing continental reach. Moreover, South Africa’s relatively advanced financial sector exposes Chinese firms to a tightly regulated environment - an experience that is worth undergoing in some sort of ‘test case’
when aspiring for more lucrative markets in the Western world. Yet the ICBC investment – probably the most significant foreign direct investment by size – is symptomatic of the proliferation of the large variety of ‘producer service firms’ that emerged in the late 1990s. These ‘service the centralisation requirements of globalised manufacturing and industrial companies (including mining). Most notable amongst these are accounting, law, advertising, corporate travel, security, public relations, management consulting, IT, real estate, storage, data processing and insurance companies’8. Increasingly, South Africa’s role is shaped by its position in the global economy to perform what Carmody9 describes as fulfilling both global and regional interests by promoting economic liberalisation for regional market access by its own corporate elites as well as for other major countries and transnational capital. This is more colloquially known as the so-called
‘gateway to Africa’ argument.
However, South Africa also faces the complexities that arise from being a part of what Garrett10 describes as the global ‘missing middle’: the many upper-middle income economies of Latin America and Central Europe that are neither low-wage economies in which labour executes routine tasks at the lowest possible cost nor knowledge-based economies based on cutting edge technological innovation. In short, because of South Africa’s global and regional role, the vast inequalities generated by the country’s deep integration with the global economy are mirrored by the enormous skills gaps between on the one hand the small but affluent indigenous capitalist class, the increasingly multi-racial middle class, and the organised working class; and on the other hand an enormous subordinate class, reliant on precarious employment and the informal sector. This configuration of class dynamics means that a relatively powerful (but declining) labour movement prohibits a low-wage, mass-manufacturing process based on ‘flexible’ labour, whilst massive and fundamental skill deficiencies in key sectors also forestall adoption of a relatively productive but high wage, value added trajectory.
Desperate to overcome being stuck between this Scylla and Charybdis, Pretoria pursues two strategies. Firstly, it uses sub-Saharan Africa as the base for its manufacturing and service related exports and secondly, it adopts a programme of heavily state financed infrastructural development programmes to position South Africa as the pivotal centre of African transport, logistics, telecommunications facilities and related services. Paradoxically, China’s role in Africa both complements and complicates these strategies.
For example, President Zuma’s announcement of a R1-trillion infrastructure-driven model in his 2012 State of the Nation address, was cited as drawing on the Chinese model of state capitalism11. As Enoch Godonwana, head of the ANC’s economic transformation committee noted at the time, ‘The Chinese model
7 Macdonald, D., “Electric capitalism: conceptualising electricity and capital accumulation in (South) Africa” in Macdonald, D. (ed). Electric capitalism: recolonizing Africa on the power grid (Pretoria: HSRC Press, 2008), 9. Fine & Rustomjee 1996 cf. McDonald, 2008:9
8 Ibid.
9 Carmody, P., “Another BRIC in the Wall? South Africa’s Developmental Impact and Contradictory Rise in Africa and Beyond” European Journal of Development Research 1: 19 (2012), 1-19.
10 Garrett, 2004
11 Mail & Guardian, State of the Nation: Zuma adopts Chinese model, 3 February 2012; Yet as Cisse & Grimm (2012) have noted, there is nothing particularly Chinese about this ’model’. South African contexts are very different and, say, Germany or France could also have been cited. What is intriguing however, is the fact that budget plan was ‘packaged’ as being consistent with the Chinese growth model.
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of building infrastructure and growing jobs will be a key focus of the ANC’s economic policy’12. With the emergence of new growth economies and the impact of these on trade flows, many African states have seen a commodity price boom that resulted in GDP growth figures long unseen in Africa. Yet, current growth paths have led to a diversification of economic activity13. To the contrary: new partners with a demand for resources have dulled the urge to diversify. This ‘cashing in’ by elites is at the very core of the ‘resource curse’14. This may also in part explain ANC state and business elites’ with close connections to the resource and finance industries, being reluctant to forego lucrative opportunities for their companies to act as intermediaries to Chinese exploration of African wealth15.
Since the early 1990s, East Asian models have played a central role in South African development debates. South Korea featured heavily during debates at the onset to democratization; during the late 1990s Malaysia was widely studied both for its significance as a model of combining high growth with the sponsorship of an ethnic capitalist class, and in the 2000s China and Brazil featured prominently. Whilst the analysis of similarities and differences between cases constitutes the core feature of comparative political economy, another dimension – namely debates about identity and more specifically status signalling, are usually not as obvious. The following brief section tries to link issues of central concern in constructivist International Relations, namely identity and status, to the more policy-directed debate about developmental models in comparative political economy.
Developmental models as status signalling
Discourses about development models rarely acknowledge the extent to which these debates constitute a basis from which state elites’ aspirational identities can be ‘read’. South African state elites’
frequent references to developmental states especially in Asia serves not only to engage in instrumental policy-making reflections, but project the idea of an imagined economy that both ties multiple and often conflicting domestic constituencies together into a shared national vision, whilst at the same time signalling an identity to the world at large. Imagined economies refer to one’s encounter with the economy through stories, images, and accounts through which projections about our relationship with the economy is projected. The concept also points to how different imaginaries circulate and offer competing visions (Clarke, 2014). Engaging in this ‘two-level’ game entails
finding out precisely how a state’s identity affects the construction of its interests vis-a-vis another state demands that the social context in which that state’s collection of identities is being discursively constructed be investigated as deeply and broadly as possible. This means exploring not only how that state’s identities are produced in interactions with other states, but also how its identities are being produced in interaction with its own society and the many identities and discourses that constitute that society (Hopf, 2002:294).
State elites’ frequent interaction with and reference to Asian developmental states involve a process of status signalling: ‘we want to be like them’. When an observable action is used to make information available to those who do not have it, in order to shape a desired image, signalling occurs. The international relations literature on signalling tends to be dominated by realist considerations focussing on two types of questions:
how can security-seeking states signal their benign intentions in an anarchic international system?
And how can states conduct coercive diplomacy and reach bargains that avoid the costs of war, while accurately signalling their resolve, credibility and intent (Pu & Schweller, 2014:144).
In contrast, the literature on status signalling ‘is a theoretically underdeveloped and unconventional type of signalling in international relations’ (Pu & Schweller, 2014:144). Generally, signals are more likely to be broadcast credibly and reliably when they are costly to the signaller to the extent that a different kind
12 Mail and Guardian, 3 February 2012.
13 Mills, G., Why Africa is poor – and what Africans can do about it (Johannesburg: Penguin Books, 2010).
14 Collier, P., The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About it (Oxford: Oxford University Press, 2007).
15 Butler A., ‘Why is China so influential over ANC politicians ?’ Business Day 7 October 2011.
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of actor would be unwilling or unable to make them (i.e. space programs, nuclear weapons, aircraft carriers). Second, regardless of whether it is intended or not, status signals are received by multiple audiences both domestic and international. Hence for ‘national leaders status signalling is tantamount to playing a ‘tricky ‘two level’ game between international and domestic audiences’. Rapid development in rising powers are likely to trigger rising domestic expectations and cause status signalling at the international level to be connected to a domestic political struggle for legitimacy (Pu & Schweller, 2014:145).
Social identity theory posits that people compare their groups qualities and achievements to those of a reference group that is either similar or higher in status. States also make favourable references to a
‘reference state’ or group of states - that are similar in culture, region, history or size – to enhance members’
self-esteem. However, if the other group is superior in terms of significant indicators and the lower status group can occupy or consider a higher position, the group may pursue an identity management strategy.
The lower status group can pursue one or more strategies: imitate the higher status group (social mobility);
defeat the other group (social competition) or ‘find new value dimensions in which it is superior (social creativity)’ (Larson & Shevchenko, 2014: 38). Pursuing social mobility involves ‘emulating the values and behaviour of an elite group to be admitted to the club. For this strategy to be feasible, elite group boundaries must be open to new members’ (Larson & Shevchenko, 2014:38). Not to be confused with a contest over material possession, social competition is not about gaining greater resources, but rather to better or surpass the other on indicators of comparison. Finally, social creativity refers to attempts by lower status states to develop or identify a new criterion for evaluation on which the group ranks highly. This strategy does not aim to challenge the status hierarchy but simply to achieve pre-eminence on its own criteria and may involve the advocacy of new norms, regimes, institutions or development models in order to make the state or group distinctive from the established powers (Larson & Shevchenko, 2014:41).
South Africa’s long-standing attraction to East Asia as a development model can be read in terms of Tajfel’s social identity theory in at least two of the three responses (considering the unlikelihood of social competition as a status goal). State elites in South Africa clearly seek to emulate the values and behaviour of an elite group of states – namely East Asian developmental states – regardless of whether economic policy and institutional capacity actually justifies such self-description. As Ben Fine (2001: 120) has noted, the East Asian states had no notion that they were developmental states until they were told so by western social scientists. Moreover, discursively in South Africa, the assumption is that the criteria of what constitutes a developmental state is somewhat flexible and open – hence the injunctions of a democratic developmental state or ‘the issue that should inform the discourse should not be about replicating the East Asian model…the focus should be on learning from it and considering lessons learned within South Africa’s own contextual uniqueness’ (Maserumule, 2012:197). In terms of a social creativity approach, the very idea of the developmental state suggests emulating a model that does not arise from the Atlantic economies, even though the ANC’s commitment to more statist models have waxed and waned over the past twenty years. Currently, the obvious tie-in between ‘reference states’ (i.e China, Brazil) and the pursuit of new value dimensions revolves around South Africa’s ascension to membership of the BRICS its various initiatives, and the status to be derived from membership of the club despite Pretoria being the junior partner in quantitative terms. Yet unlike any of the other BRICS, South Africa’s membership rests on its supposed role of representing the African continent (while Brazil shares the complexities of being regionally dominant, it does not need to justify its role in BRICS on the basis of regional representation). However, South Africa’s position in the BRICS and the significance of the developmental state as a status signal is not without contradictions. For in as much as the consolidation of South Africa’s leadership on the continent and championing the ‘African Agenda’ constitutes the foundation of Pretoria’s foreign policy, African states rarely feature in state elites’ references to African developmental states. This cannot be attributed to the lack of cases with significant potential for policy learning. Thandika Mkandawire (2001:304) has illustrated that during the period 1967-1980 ten African countries enjoyed a growth rate of 6 percent, comparable to many Asian cases. These included not only resource rich countries like Gabon, Botswana, Congo and Nigeria, but also Kenya and Cote d’Ivoire.
Moreover, it might be plausible to conceptualise at least two ‘waves’ of developmental states in Africa in the post-Cold War period. The first would be ‘established’ cases such as Mauritius (Meisenhelder 1997;
Sandbrook 2005; Sandbrook et al. 2007) and Botswana (Taylor 2003; Hillbom 2012) and ‘emerging’
developmental states such as Uganda (Mbabazi & Taylor, 2005), Ghana (Ayee, 2013) and Ethiopia (Lefort, 2012; Gagliardone, 2014).
Conclusion
By drawing on the developmental state debate in South Africa, this paper argues that economic development plans especially for ‘rising’ powers in the developing world constitute a basis from which
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state elites’ aspirational identities can be ‘read’ and can therefore be seen as useful forms of signalling that are often not treated as such in much of the development studies literature. Likewise, despite the growing interest in the significance of identity in International Relations, these interests are often not extended to issues in political economy or development. By trying to merge these fields/approaches it enables a connection between the domestic and the external face of state-societal interaction to reveal the way in which state elites seek to project an identity or aspiration both at home and abroad and what kinds of visionary promises as well as contradictions such a process of identity signalling entails.
To do so, the paper highlights the extent to which especially Asian developmental states have frequently appeared in policy documents or are routinely referred to by state elites. South Korea already featured in early 1990 documents; the Malaysian case has been a model especially in relation to affirmative action and the promotion of a Black capitalist class in the form of Black Economic Empowerment (BEE) and then later, so-called ‘broad-based’ BEE throughout the 1990s and early 2000s and within the first decade of 2000, China and to some extent Brazil, appeared as models to be emulated, consistent with South Africa’s inception within the BRICS. In practice however, South Africa shares very few features with the classic authoritarian developmental states that initially arose in Northeast Asia. Neither does South Africa comply with the challenging demands for a democratic developmental state as posed by Evans and Heller (2015). Rather, the developmental state debate should be read as a two level game: at the international or external level as a form of status signalling, consistent with South Africa’s projection of itself as a rising power and at the domestic or internal level as a strategically vague vision to help generate a national identity around a kind of imagined economy.
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